ASIC and FCA licensed Retail FX broker AETOS Capital Group have provided their daily commentary on traditional markets for April 23, 2019.
The Euro closed higher on Monday, closing at 1.1259(+15 pips) against the greenback as the Wall Street opened in the red, although the three main indexes bounced from their early lows, unable anyway to post some substantial gains. In terms on economic data releases, there were no news coming from Europe, while the US released their Chicago Fed Manufacturing Activity Index, which resulted in -0.15 in March, improving from the previous -0.31, and Existing Home Sales for the same month, which declined by 4.9% when compared to February, more than doubling the market’s forecast of -2.3%, while February’s reading was downwardly revised to 11.2%.
This Tuesday, the Union will publish April preliminary Consumer Confidence, seen improving modestly to -7.1 from the previous -7.2, while the US will offer March New Home Sales, and the April Richmond Fed Manufacturing Index, previously at 10. For more relevant figures, traders will have to wait until Thursday(22:30 AEST), when the US will release Durable Goods Orders.
EURUSD 4 Hour Chart
Based on the chart above, the modest bullish run for the pair seems corrective, as the pair recovered half way to the 61.8% retracement of the same advance by the end of the previous week. The positive momentum is building up, as, in the 4 hours chart, technical indicators have been correcting oversold conditions, having entered positive ground although without strength enough, and as the price challenges the 20(Red Line) and 100 SMA(Blue Line), both converging around 1.1250. Nevertheless, and in the longer perspective, the risk remains skewed to the downside, with a bit of relief for bulls coming in a firmly advance beyond 1.1280, the immediate resistance.
The Pound closed lower on Monday, closing at 1.2980(-11 pips) against the greenback. London markets were off amid Easter Monday, with the pair spending a second consecutive day within a well-limited range, albeit posting a sixth straight lower low daily basis.
The Pound took a hit from a report saying that Conservative lawmakers are again trying to oust PM May, amid the lack of progress in Brexit negotiations, both inside and outside the kingdom. The UK gained some additional time after the initial departure date set to March 29, now having up to October 31 to get the withdrawal agreement being approved by the UK Parliament. So far, lawmakers rejected such a deal three times, while EU officials keep repeating that it´s not open for re-negotiation. Talks between PM May and Labour leader Corbyn came to no right end, stalling last week amid May holding on to her ‘red lines’ as Corbyn said.
Conservatives have already tried to ousted May last December, and the rules state that they can’t challenge her authority within the first year afterward, although rules can always be changed. The UK macroeconomic calendar has nothing to offer this Tuesday and will remain quite scarce for the rest of the week.
GBPUSD 4 Hour Chart
The GBP/USD pair’s attempts to recover some ground were limited by sellers aligned around the 1.3000 figure, where it also has a daily ascendant trend line coming from 1.2959, March’s monthly low. This last is the main support as large stops are suspected below, with a break of it opening doors for a steeper decline, mainly if Brexit uncertainty keeps undermining Sterling’s demand. Meanwhile, the 4 hours chart shows that a bearish 20 SMA(Red Line) keeps capping the upside, now at around 1.3010 while extending its decline below the 200 EMA(Blue Line), this last roughly 100 pips above the shorter one. Technical indicators continue lacking directional strength within negative levels, unable to suggest an upcoming direction but keeping the risk skewed to the downside.
Major Economic Events happening this week (AEST Time Zone)
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